12570 N Cotton Ln #8790

Surprise, AZ 85388

$1,125,000D+

12 bd · 8.0 ba · — sqft · Built 2025 · MultiFamily · Active · 57 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $10,229/mo
• Mortgage (P&I): −$5,900
• Tax + insurance: −$1,875
• HOA: −$0
• Vac / Maint / Mgmt: −$2,148
• Net cashflow: $306/mo
• Annual: $3,675/yr
• Cap rate: 6.62%
• Cash-on-cash: 1.17%
• DSCR: 1.05
• 1% rule: 0.91%
• Cash to close: $315,000

Investor read

• This is a 4 × 3-bed/2.0-bath units multifamily listed at $1.12M. Condition is rated good.
• At list price, monthly cash flow is $306 ($4k/yr) — positive. Per door: $77/mo.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $1.02M (9.1% below list).
• It's been on market 57 days — a 3% lower offer ($1.09M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $1.02M (9.1% below list) — sets the bar for 1% rule.
• In year one you build about $11k of equity ($8k loan paydown + $3k appreciation (0.3% local appreciation)).
• Location reads 74/100 on livability (#19 in AZ, #4,616 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, housing A+, employment A-; Watch: health & safety D+, amenities D-, commute F.
• Dysart Unified District (4243) (suburban): math 34% / reading 40% proficiency, ranked #73 of 249 in AZ (top 29%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: Rents soft (-0.6%/yr); 376 active listings in the ZIP; high-income renter base; 36,011 units permitted in Maricopa County in 2024 (12,801 in 5+ unit buildings).
• Maricopa County population projected at +38% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 3 sale attempts since 2y ago with the ask held roughly flat each time — persistent listings suggest the price (not the market) is what's stuck; bring a comps-based counter.
• By year 6, paydown + projected appreciation supports a ~$71k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: moderate wildfire risk; extreme-heat days projected 7→19/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.6% vs local median 3.3% in Surprise — top-decile yield for the area; either an underpriced asset or a hidden risk that comps aren't pricing in. Stress-test before assuming the spread holds.
• At $10,229/mo this rent would consume 109% of the median local household income ($112k/yr) (locally 224% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• It's been on market 57 days. Have you received any prior offers? Is the seller open to a 9% concession, seller financing, or rate buy-down credit?
• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• The area grade is low — what's the realistic commute time and amenity access for the typical tenant pool here? Any planned neighborhood developments (good or bad) we should know about?
• What's the average days-on-market for RENTAL listings here right now (not sales)? A rising rental-DOM trend means longer vacancies and softer asking-rent achievability than the comps imply.
• What's the recent tenant-quality profile in this submarket — average credit score on applications, eviction rate, late-payment / NSF rate, and stable-employment percentage? A property-management company in the area should have these aggregated.
• How much new apartment / multifamily construction is in the pipeline within 1–3 miles? Heavy new supply (>2% of stock underway) typically softens rents 12–24 months out; light construction supports rent growth.